Vice President of IMANI Africa Bright Simons says the revenue management contract between Strategic Mobilisation Limited (SML) and the Ghana Revenue Authority (GRA) is needless.
He stated that many procedures adopted by SML have yielded no results.
According to him, the Ghana Revenue Authority (GRA) and SML contract required the latter to verify, among other things, whether the prices of goods importers presented to the tax agency were the exact cost on the market.
This was expected to help the GRA determine how much taxes should be charged on the goods and help in revenue mobilisation.
However, he said the KPMG report revealed that the country paid $15 million to $16 million for the service, which could have been obtained at a cheaper rate on the open market.
In an interview on May 26, he explained that the service was completely unnecessary.
“In the KPMG report, we learned that some of the services that SML provided, particularly the ones to do with trying to prevent importers from lying about the prices of the goods that they buy, which will affect the duty and trying to prevent GRA officers from lying about the right duty they should impose, those services were being charged at an astronomical cost.
“We ended up paying over $15 million, nearly $16 million. When, in fact, you have alternatives on the open market, which could have cost us barely $20,000. We ended up paying nearly $16 million for this company to apparently help us to prevent importers from lying about the prices of the goods they bought overseas to sell in this country when we could just subscribe to commercial databases and pay less than $20,000 or less for the same information,” he said on Joy News.
Background
An investigation by The Fourth Estate this year uncovered numerous irregularities in the contracts between Strategic Mobilisation Limited (SML), the Ministry of Finance, and the Ghana Revenue Authority (GRA).
The investigation revealed discrepancies in SML’s claims regarding its services aimed at tackling revenue losses in the downstream petroleum sector.
President Akufo-Addo subsequently instructed KPMG to conduct a comprehensive audit.
Despite SML’s assertions that its services were effectively addressing under-declaration, dilution, and diversion of petroleum products, evidence showed that these functions were being carried out by other companies and the National Petroleum Authority (NPA).
Managing Director of SML, Christian Tetteh Sottie, admitted to the inaccuracies and promptly removed the false claims from the company’s website.
Despite these revelations, Minister of Finance Ken Ofori-Atta initiated a process in 2023 to expand SML’s contracts to include the gold and oil-producing sectors. This decision significantly increased the annual contract sum to over $100 million.
Following the investigation and subsequent public outcry, President Akufo-Addo suspended the contracts and commissioned KPMG to conduct an audit and submit a report.
The report resulted in many revelations leading to a review of the contract.